Who would have thought decades after the mass adoption of digital photos, Eastman Kodak (KODK) would be center frame for so many investors.
Shares of the company have more than doubled this year amid reports the company has secured government loans to manufacture ingredients for generic pharmaceuticals in the company’s U.S. factories. While shares rallied around the news, the stock tumbled this week after the loans were withheld pending an investigation into suspicious trading in Kodak ahead of the announcement. In this Advisors In Focus: TrackStar Insights Edition, we examine user engagement with the ticker as shares surged and then plunged over the past two weeks.
Prior to the loan announcement, on July 28th, advisors expressed relatively little interest in Kodak. According to TrackStarIQ data, the stock saw virtually no pageviews from advisors across key financial publishing sites in the first few weeks of July. Instead, the names generating the most interest were those generally associated with ‘modern tech,’ such as Tesla (TSLA), Apple (AAPL), and Amazon (AMZN). Several biotech names—Inovio Pharmaceuticals (INO), Sorrento Therapeutics (SRNE), and Ibio (IBIO)—also remained heavily researched during the COVID-19 pandemic.
However, interest in Kodak picked up noticeably on July 28th when shares surged 200% to $7.94. That was the day before President Trump announced an agreement between the government and Kodak to produce ingredients for generic drugs; the $765 million loan was made available under the Korean War-era Defense Production Act.
As news of Kodak’s massive loan made the rounds on July 29th, the stock rallied another 320% to $33.20. It reached a high of $44.44 intraday on July 30th before closing at $29.83 per share. On that day, share volume reached nearly 100 million, three times the daily average. Options volume surged to 13 times normal, as 300,000 contracts changed hands. In terms of pageviews, KODK saw an exponential increase on July 29th and 30th; however, and that lift is mostly attributable to advisors with assets under management between $10 million and $100 million.
July 30th proved to a peak for Kodak shares. The stock is under fire this week, falling 28% Monday, after the proposed loans to the company were withheld, and the Securities and Exchange Commission is probing the trading activity in the stock before and after the announcement (the company granted its chairman options for 1.75 million shares the day before deal with White House).
Advisor engagement in Eastman Kodak remains strong in the first half of August and through the company’s Aug. 11 earnings report. The stock will likely see continued interest, and high volatility, as investigators determine if insider-trading allegations have merit and government officials decide whether or not to approve the $765 million in loans.